Yearling syndications

[BenScadden]

Now let me start by saying I think it's absolutely fantastic that a couple of syndicates have started investing in standardbred yearlings.

I was going through the yearlings bought by Slade Bloodstock as an example - and comparing the share costs v sale price. I was quite surprised by the mark-up - but maybe that's just a standard thing with syndication. I'm not familiar with the usual practices.

Here's the list of Slade yearlings bought this year (and I hope they're all stars to promote more sales):


Four Starzz Shark-Miss Chevious - sale price $15k; total share value $29.5k

Courage Under Fire-Rigaleto Franco - sale price $24k; total share value $39.5k

Art Major-Barogue Pearl - sale price $35k; total share value $58.5k

Four Starzz Shark-Joy Luck sale price $35k; total share value $59.5k


Is this a standard kind of mark-up? Anyone had any experience with similar situations?

Anyway, good luck to them. Hope they win stacks of races ... can only be a good thing for the game.

[buster]

seems a bit steep, but maybe they would be including all the bills as well for the next 12 months?

i wouldnt buy one off slade if they are to lance anyway

i know theres a few shares available in the ones that purdon bought or people bought for purdon to take home

[BenScadden]

It doesn't sound like it includes any costs ... according to their website, there are ongoing fees of $170 a month for each 10% share.

[triplev123]

I liked the Four Starzzz colt from Joy Luck. Had a bit of swish about him.

[mightymo]

seems an outrageous mark up. it must include other things. If not, its not likely to be filled...

[BenScadden]

I'm not sure, Mo ... reading the story on their website, it seems not ... here's the link - http://sladebloodstock.com.au/news/article/19/JOIN+SLADE+BLOODSTOCK+ON+ITS+2011+HARNESS+RACING+A DVENTURE

See you in NZ, I hope.

Cheers,

Ben

[buster]

if they can sell those horses then everything from now on will be a non-sale entry and then i will syndicate them myself

[mango]

Why would you want to get in a syndicate if they mark up the price so much and Ben the first yearling you mentioned has near doubled in price and at $170 a month for a 10% share that works out to be $1700 for a horse which works out to be $54 a day and i suppose you will have costs on that.

[buster]

Why would you want to get in a syndicate if they mark up the price so much and Ben the first yearling you mentioned has near doubled in price and at $170 a month for a 10% share that works out to be $1700 for a horse which works out to be $54 a day and i suppose you will have costs on that.

once you incorporate the reduced days for agistment in their first year for spelling it would be alot more than 54 a day

[BenScadden]

It sounds like that $170 is all-inclusive (training, staking, management) ... but still $1700 a month - or $20,000 a year - is at the top end, I'd think, especially when you take into account the horse will undoubtedly be out of work for periods.

Like I said, hope they do well - even if they're pocketing good dough - because we need some fresh blood in the ownership ranks

[mightymo]

we certainly need new owners in this sport, but I would have thought the first question any one would ask is "how much did it cost".

Not going to be in NZ Ben. I know you must think I am crazy as i do have 13 horses to sell, but i have a heap on with work at the moment so will need to do things by phone and watch over the internet.

You going to buy or just observe?

[BenScadden]

Yes, agree it seems like a really significant mark-up, Mo ... they can't lose no matter how the horse performs. Guess that's how the business operates ... I don't know.

I'll check out all your lots in NZ ... sure they'll do well. You're starting to get some good runs on the board!

We'll see how it goes over there ... never say never but probably the only thing we'll bring back home is a cold.

Cheers for now,

Ben

[maestro]

I was in a few thoroughbred syndicates when I in the States (CA) a couple of years ago. Claiming horses for 40-50K and turning them over after a race or three. We got lucky with a few and won quite a number of races along the way ... but the big winners are the Cookie Boys running the syndicate and the trainers, his vet etc The outlays were enormous, way over the top. It looks like these guys are off to a similar start.

[maestro]

and yeah if I was even remotely interested, I'd have a vet go over the horse/s with a fine tooth comb.

and I'd steer clear of syndicates involving Mark and Kim Waugh : )

[BenScadden]

Well, I asked a couple more questions about this ... seems there's a pretty significant 'add-on' cost by the syndicator. I'm not sure of the justification but that's the way it seems to work.

Think I'll investigate getting a bloodstock agent's licence!!! There's good money to be made!!!

[mango]

I think someone should get syndications going but be realistic about it and to be honest i can't see why there should be any "add ons". However many in the group it should be split and everyone pay equal.

[buster]

if they are going to run a syndicate i think they should get something, but anything over 10% of the horses total value is ridiculous

more fair, sell 90% of the horse for 100% of its original cost and the remaining 10% can be kept or sold for a profit

[mango]

I'll go with that idea buster it sounds a lot better than seeing a horse's price doubled.

[BenScadden]

Well of those four out of the Melbourne sale, the outlay was $109,000 - and the return to the syndicator will be $187,000 if the horses are fully syndicated.

I reckon $78,000 is a pretty reasonable fee to select some yearlings at a sale. Most of us would do it for free.

Maybe there's something extra to the whole equation that I'm missing. If anyone can shed some light on the situation, feel free to drag me from the dark.

[triplev123]

I'd be only too happy to mark up a swag of youngsters and go around looking them over and, as you said Ben, I'd do it for free too (Ok, well not exactly for free, a Coke & a Steak Sandwich + onion & bbq sauce is the standard fee). If it meant the introduction to the sport of a swag of new Owners then sign me up. More than happy to do so.

[montana]

usually the syndicators have costs such as advertising / asic fees etc etc . i have bought some thoroughbred shares through syndication companies and they usually send you a product disclosure statement outlining all the fees and their commissions etc . on face value it does seem a little steep but i guess it has to be worth their while. even at the prices quoted its not a bad format as it allows people that dont have a clue how to select a yearling a chance for it to be done professionally ( you would hope and assume ) , you can also take a small % of a horse that you probably wouldnt have been able to buy outright or spread what you would spend on one yearling across a few. by nature these syndication companies rely on racetrack success for their business to continue so you would think they would be selective in the yearling selection process. so it probably does have appeal to new owners which can only be good for the industry.

i have personally had shares in 1 galloper with slade and i would rate the experience as only fair , my main criticism in early days they really lacked a personally touch but i must say it did improve and seem to become better.